A self-serve, frictionless path to using a product is the way all business software will be distributed moving forward. This shift originated from buyers who want to be able to choose whether they want to get a demo or use the product first. With the past year presenting challenges to all software companies that have an unprofitable business model, there’s even more pressure on these companies to lower sales and marketing expenses.
The success of leading enterprise software companies like Slack, Zoom, and Atlassian demonstrate that it’s possible to have lower sales & marketing costs by utilizing self-serve distribution and a product led growth (PLG) go to market motion paired with a more customer-centric sales and marketing approach.
One of the challenges companies face when they allow users to try their product first is that the traditional ways of scoring leads becomes less relevant.
Current state of lead scoring
Lead scoring currently prioritizes website sign ups and firmographic/demographic criteria. This scoring methodology is often called marketing qualified leads (MQLs) and many B2B marketing teams are judged based on the amount of leads they’re able to drive on a monthly/quarterly/annual basis.
3 reasons MQL scoring falls short
MQLs are useful, but they have a few drawbacks:
1. MQLs can be a black box
Lead scoring based on points associated with intent from web browsing, title, company size etc can be a bit of a black box. It’s hard for sales or marketing teams to know how to appropriately action off of leads when they hit the MQL threshold. You need to understand why they hit those scoring thresholds.
2. MQLs are only for the top of the funnel
At a PLG company, your sales and marketing teams need to target and engage with customers beyond just the website sign up. You can think of the growth model more like a loop vs. a funnel. MQLs are only useful for acquisition and are less helpful at determining prioritization once a customer is using the product.
3. MQLs don’t include propensity data
Most MQLs are logic-based scores that don’t take into account conversion events and other predictive factors. As a result, they can be lower quality than scores that look at whether or not the lead exhibits similar signs as customers who have successfully converted in the past.
While it’s important to look at things like website browsing data, whether or not someone who signed up is part of a company in your ideal customer profile, or whether they have an executive title, relying simply on MQLs as a Growth Marketer at a PLG company is not going to cut it.
Future State: Customer Lifecycle
The reality for PLG businesses is that lead scoring should not be based on a funnel, but instead on a growth loop. In traditional marketing, the concept of the funnel is used to represent a large group of prospects that either progress or fall out of consideration to purchase a product.
For product led, since users can start using the product immediately often without paying, the right way to think about growth is through loops. Users adopt the product, get to value, often invite teammates and then monetize via self-serve.
Next comes expansion, where monetization can increase, based on usage, seats, features, or other factors. Sales and marketing resources can be put to work throughout this entire process to assist with onboarding, encourage upsell, and help to drive desired outcomes.
The main benefit of using lead scoring and targeting users and accounts based on where they are in the customer lifecycle is the ability to personalize your messaging. Rather than focusing on driving a specific action that matters for sales (ie. qualification), you can focus on helping your customers be more successful with the product.
Scoring leads across the customer journey
To enable effective growth loops, you need to be able to build ML-powered scoring models throughout the customer lifecycle. That’s why we’ve built the first platform that allows you to select desired outcomes and then identify the best fit users or accounts that have not yet hit those outcomes. At Correlated, we power the go-to-market strategies for Growth teams.
Segment your customer base
Correlated enables you to segment your customer base depending on where they are in the lifecycle. That way, you can run different tactics and messaging for someone who has just signed up for your product vs. a power user that’s 6 months in and has invited their entire team.
Finally, through Correlated Playbooks, you’re able to enable your team where they are today. Build powerful actions to drive marketing campaigns in Marketo, sales emails in Outreach or Salesloft, and customer success notifications in Slack to help convert users from free to paid, expand existing customers, and prevent churn. Try it for yourself, or book time with a team member to talk through your specific use case and needs.